Losing My Edge :: Personal Narrative, Autobiographical Essay

Losing My EdgeI was friends with e very(prenominal)one on the North team, our rivals, but during the season, we seemed liked enemies. We always talked crap to each other. Whos going to state this year? We would say. gumption to us they would respond, Who went to State last year? The whole season, we anticipated playing North. It all started since the first practice. Our coach would scream, North is practicing harder than you, they be getting in shape, they are preparing. This do us very angry and his tactics to do better did push us. The day seemed so far away, but the calendar days grew nigher and closer to this well-prepared day. I made sure to eat my carbohydrates and to get enough sleep the night before. Finally I had reached the day, and school dragged on forever. The bus force back took forever as we traveled the thawed out highways, anticipation was in the air. When entering the gym, after debarking the bus, I took a deep breath as my stand filled with butterflies, think ing about everything I carried on my shoulders and all that was expected of me, especially when imagining everyone who would be there. My parents, sister, grandparents, aunts, uncles, friends, peers, coaches and teammates all expected the best. How nerve racking. I muttered under my breath. When we were in the lockeroom, I felt cadged like an animal. This its it Its your turn. Our coach yelled. Finally we escaped from the lockeroom into the crowded gym. This would determine who would go to the State Tournament. Excitement raced through our bones, as our names were announced for the line-up. Jenna Osheim, 60, senior forward My body got the shivers as I ran to the middle of the floor. The referee threw the ball into the air and the race was on. Half time, and the game was neck in neck. epoch ticked away and we were both battling back and forth. Come on Jenna, its up to us a teammate of mine said to pump me up. I wasnt having a very good game and was getting down on myself. We couldnt lose to this team, as we did the year before. We battled back and forth, we would have, and then they would answer our call. The last minute lasted forever, the referee made a bad call and buzzer finally sounded, leaving us to fall short of one point to have a total score of 54-53.

Canterbury Tales: The Knight :: Geoffrey Chaucer Canterbury Tales Essays

Canterbury Tales The entitleIn his prologue, Geoffrey Chaucer introduces al wizard of the characters who areinvolved in this fictional journey and who leave alone tell the tales. One of the moreinteresting of the characters included in this introductory section is theKnight. Chaucer initially refers to the Knight as a most distinguished human beingand, indeed, his sketch of the Knight is highly complimentary. In this essay, Iwill contrast Chaucers ideal Knight with its late equivalent. The Knight,Chaucer tells us, possessed right horses, but he was non gaily dressed. Indeed,the Knight is dressed in a common shirt much stained by where his mail hadleft its mark. In former(a) words, Chaucer is telling us that the Knight has justarrived home from service and is in such a hurry to go on his pilgrimage that hehas not even paused before embarking on it to change his clothes.Additionally, the Knight has led a very busy life as his combat careerhas taken him to a great many places. He has seen military service in Egypt,Lithuania, Prussia, Russia, Spain, North Africa, and Asia Minor where he alwayswon the highest wonder. Amazingly, even though he has had a very successfuland busy career, he remains an extremely humble man indeed, Chaucer maintainsthat he is meek as a maiden. Moreover, Chaucer claims the Knight has neversaid a rude remark to anyone in his entire life. Clearly, the Knight possessesan outstanding character, and Chaucer gives to the Knight perhaps one of themost flatter(prenominal)ing descriptions in the General Prologue than any other character.His Knight can do no wrong he is an outstanding warrior who has fought for thetrue faith (according to Chaucer) on ternion continents. In the midst of allthis, however, Chaucers Knight remains modest and polite. Thus we see him asthe embodiment of the traditional chivalric code bold and brazen-faced on thebattlefield, devout and elegant off it. Apart from the moral message containedin the story, perhaps this tale of Chaucers is of even further interest tomodern-day readers. In our twentieth-century America, we would like to thinkthat we solely dont have enough people in our society who we can liken toChaucers Knight. Perhaps we are under the impression that our modern societydoes not breed such virtuous people as existed in Chaucers time.We remember that Chaucers work represented one of the few sources ofliterature on tap(predicate) to the people of England in the latter half of thefourteenth century The Canturbury Tales was indeed a precursory form of massCanterbury Tales The Knight Geoffrey Chaucer Canterbury Tales EssaysCanterbury Tales The KnightIn his prologue, Geoffrey Chaucer introduces all of the characters who areinvolved in this fictional journey and who will tell the tales. One of the moreinteresting of the characters included in this introductory section is theKnight. Chaucer initially refers to the Knight as a most distinguished manand, indeed, his sketch of the Knight is highly complimentary. In this essay, Iwill contrast Chaucers ideal Knight with its modern equivalent. The Knight,Chaucer tells us, possessed good horses, but he was not gaily dressed. Indeed,the Knight is dressed in a common shirt much stained by where his armor hadleft its mark. In other words, Chaucer is telling us that the Knight has justarrived home from service and is in such a hurry to go on his pilgrimage that hehas not even paused before embarking on it to change his clothes.Additionally, the Knight has led a very busy life as his fighting careerhas taken him to a great many places. He has seen military service in Egypt,Lithuania, Prussia, Russia, Spain, North Africa, and Asia Minor where he alwayswon the highest honor. Amazingly, even though he has had a very successfuland busy career, he remains an extremely humble man indeed, Chaucer maintainsthat he is meek as a maiden. Moreover, Chaucer claims the Knight has neversaid a rude remark to anyone in his entire life . Clearly, the Knight possessesan outstanding character, and Chaucer gives to the Knight perhaps one of themost flattering descriptions in the General Prologue than any other character.His Knight can do no wrong he is an outstanding warrior who has fought for thetrue faith (according to Chaucer) on three continents. In the midst of allthis, however, Chaucers Knight remains modest and polite. Thus we see him asthe embodiment of the traditional chivalric code bold and fearless on thebattlefield, devout and courteous off it. Apart from the moral message containedin the story, perhaps this tale of Chaucers is of even further interest tomodern-day readers. In our twentieth-century America, we would like to thinkthat we simply dont have enough people in our society who we can liken toChaucers Knight. Perhaps we are under the impression that our modern societydoes not breed such virtuous people as existed in Chaucers time.We remember that Chaucers work represented one of the few sources of literature available to the people of England in the latter half of thefourteenth century The Canturbury Tales was indeed a precursory form of mass

A Separate Peace: Finny - How Things Change Essay example -- essays re

A Separate Peace Finny - How Things Change     In the novel "A Separate Peace," by John Knowles, a boy named componentvisits his high schooltime 15 years after graduating in order to find an interior peace.While attending the private boys school during the second World War, Genesbest friend Phineas died and Gene knows he was partially responsible. Phineas,or Finny as he was sometimes called, was the most popular boy in school. He wasa handsome, taunting, daredevil athlete. Gene, on the other hand, was a lonely,self-sufficient intellectual. Somehow the two became honest friends, or so Finnythought. Gene, unfortunately, was bitten by the green-eyed monster of jealousy.Gene just couldnt come to grips with the idea that a person of Finnys staturewould want to be his friend. Genes envy grew to a point where he was willingto severely injure Finny for being too perfect. Unfortunately for Finny, Genesucceeded. Finnys apparent perfection, his strong beliefs, and his ability toforgive trace his ripening throughout the novel.     Finnys seeming perfection was the basis for Genes resentment towardshim. Gene thought that everything Finny did was perfect, which just upset Geneall the more. Finny was so perfect that he didnt lot what others thought,like when Finny wore a pink shirt as an emblem after the bombing of centralEurope. " ...Pink It makes you look like a fairy Does it? He utilize thispreoccupied tone when he was thinking of something more interesting than whatyou had said." One time Finny and Gene were at the swimming pool when Finnynoticed that a boy named A. Hopkins Parker had the record for the 100 yards freestyle. When Finny realized that A. Hopkins Parker had graduated before theycame, he remarked, "I have a feeling I can swim quicker than A. Hopkins Parker."He was right. Gene was ecstatic that Finny could do such a thing without anytraining or anything. All Gene could say was, "Youre too good to be true." Incertain ways he was.     Throughout the book Gene knows that Finny has some strong beliefs. Thefirst three he noticed were "never say you are five feet nine when you arereally five feet eight and a half" "Always say some prayers at wickedness because itmight turn out that there is a god" an... ...y?"     "I believe you. Its okay because I understand and I believe you.Youve already shown me and I believe you." Finny forgave Gene and all was well,at least for a little while.     Finnys development can be seen throughout the novel by tracing hisseeming perfection, his strong beliefs, and his ability to forgive. Finnychanged from being the best athlete in the school to being the only one whocouldnt go to the war. Finny was a very good person. Finny was a very firmbeliever in what he thought was right. Finny was a very forgiving person,believing in the forgiveness of frien ds. Unfortunately, Finny died due to thenegligence of the school doctor. When Finnys leg was being set some bonemarrow escaped into his blood stream stopping his heart. When Gene heard thisnews he didnt cry. Gene felt that, along with Phineas, he himself had died,and you dont cry at your own funeral. Gene went back to his school to come togrips with the fact that he was partially responsible for Finnys death. Finnywas not perfect Ds on his tests and bad grades show that. But to Gene, Finnywas perfect and always would be.

Hinduism and Buddhisn Essay -- Religion, Karma, Krishna

Two major religious caterpillar tracks found in the Indian subcontinent argon Hinduism and Buddhism (LR, 37). Hinduism is seen as a polytheistic and a monotheistic tradition that evolved from other Indian religious traditions. Hinduism is also known as Sanatana Dharma whose goal is to achieve moksha and live life according to the Dharma (LR, 43). Buddhism is a nontheistic religion that is based on the teachings of Shakyamuni Buddha, known as the Dharma, which offers a path to enlightenment by practicing compassion and achieving liberation from poor (LR, 72).Hinduism today is known as Sanatana Dharma, which means eternal religion, law, cosmic order, and duty. This tradition began in the Vedic Age around the Indus Valley in India where it is said that the Vedas were created orally, except the orgins of the Vedas remains unclear. The Vedas were first written down around 1500 BCE and consist of collections of hymns containing of quadruple parts the Samhitas, the Brahmanas, the Arany akas and the Upanishads (LR, 39-41). The Samhitas consist of hymns worshiping Vedic gods, the Brahmanas explain the meaning of rituals and sacrifices and provide instructions for acting these acts, the Aranyakas contain philosophical texts that are known as forest treatises, and finally the Upanishads, which is comprised of sophisticated philosophy that explains personal transformation that results from ritual participation. The Rig Veda is the oldest scripture of the Vedas which praises the four devas Indra (the god of thunder and rain), Agni (the god of fire), Soma (a sacred drink) and Ushas (the goddess of dawn). The Upanishads were written by rishis, who were thought to be human forms of Brahman (the Supreme god), that express the principles of Sanatana Dharma.... ... five precepts (notes). Mahayana, the path of compassion and wisdom, is the guerrilla major school of Buddhism who regards the Buddha as a universal principle with three bodies. The first body has no form and enc ompasses the wisdom of the Buddha, the second is the body of bliss and emphasizes the Dharma, and the third is the body of transformation, in which the Buddha takes on many forms to help human beings achieve liberation from suffering (LR, 83). The Mahayanasutras are the scriptures followed that honor the Pali Canon, show the importance of religious experience (LR, 82). One form of Mahayana are bodhisattvas, future buddhas who are devoted to liberating others from suffering without having to leave society to do so. One primal aspect of a bodhisattva is compassion for others, an important Buddha teaching that emphasizes on the idea on no-Self (notes).

Ethics of Civil Disobedience Essay -- Ethics Morals Philosophy Rationa

Ethics of Civil DisobedienceBan animal cruelty Give aid to the poor carry out the rainforests Obey the police As a human race we must strive to fulfill these commands, for they are our moral duties and obligations. Our obligation to morality sometimes leads to a dilemma. What happens when a law contradicts the morally right thing to do? Would it be moral to act illegally by breaking the law? No progeny how drastic the measure, we are still required to act morally--even if one must break the law to do so. But why is it so important to be moral that one could justify something as serious as breaking the law?If morality is so significant that one could justify breaking the law we must consider the importance of being moral in the first place. The question wherefore be moral? is difficult for many philosophers to answer. Just by our attempt to answer this question we would already be displaying the need to act morally. This is more clearly seen with the difficulty is asking a similar type of question, Why act rationally? According to Singer many philosophers reject the question Why act morally? because it is parallel to this question of acting rationally. It would take rationality to explain why one should act rationally. Thus defeating the need to explain the importance of rationality in the first place. it needs no justification, because it cannot be distinctly questioned unless it is already presupposed (Singer 316). Similarly why be moral? asks for a moral reason to act morally.Modern Kantianism considers acting rationally to be the same as acting ethically. If this is true, one could rationalize a need that is in their own self interest, yet at the same time against the interest of another individual. Since this c... ... is the alone means of preventing greater violence would be responsible for the greater violence they fail to prevent (Singer 307). Pacifism can be seen in the same trend as the omission approach to euthanasia. Although you are not dir ectly killing, by refusing to step in you are allowing to die. Since the ends can justify the means, even something as stalk as violently breaking the law can be the moral thing to do.Above all we desire a meaning to life. We can let meaning by acting morally. Therefore, one is not obligated to obey a law that contradicts morality. After all, it would be morally wrong of the government to refuse anyone meaning in life.Works Cited * Singer, Peter. Practical Ethics, 2nd edition. 1993. Cambridge Cambridge University Press * Rachels, James. The Elements of Moral Philosophy, Fourth Edition. McGraw Hill, New York, 2003.

Non-duality: Madhyamika, Yogacara, and Zen Essays -- Religion, Buddhis

Buddhism first developed in India by Siddhartha Gautama as a performer to end suffering. Nirvana could ultimately be achieved with adherence to the Four Noble Truths and the middle way. The Mahayana tradition arose within Buddhistic with opposite interpretations of Buddhas teachings and new ideals. It stress the role of the bodhisattva and the bodhisattva path as the means to attain enlightenment, or Buddhahood. The nature of the Buddha is no longer equivalent to that of the arhant, rather, he is beyond the level of the arhant he is a transcended being. Within Mahayana, Madhyamika and Yogacara philosophical schools developed in India and the Zen tradition arose once Buddhism spread to East Asia. While Madhyamika, Yogacara, and Zen accent several varied concepts in an effort to attain enlightenment, all three adhere to the Mahayana doctrine of emptiness and non-duality. At the core of the Mahayana doctrine of emptiness lays in the early Buddhist belief in anatman, or no self. There is both a spiritual and solid part to human nature, but it is the honorable identity that survives finis and is reborn (Prebish and Keown 56). The concept of anatman eliminates attachment to the material by claiming that an individual has no real core, or soul, and the five skandhas, or aggregates of attachment, namely the material form, feelings, perceptions, mental formations and consciousness, provides evidence. It is held that n nonpareil of the five skandhas atomic number 18 able to exist in the absence of the other four (Hershock). Desire is one of the main causes of suffering, and the five aggregates are the objects of desire. Dependent insertion holds that everything is conditioned and lack intrinsic being of their own (Prebish and Keown 49)... ...anslation can be seen in translating emptiness. If emptiness is translated as upaya, or skillful means, past emptiness is a way of eliminating attachment to all views by criticizing them much like Nagarjuna doe s. Emptiness potentially can liberate or trap one further into greater conceptual illusions (Low 133). The trap occurs when the view is not is not ultimately true. Enlightenment is central to Buddhism it is a form of freedom. Madhyamika, Yogacara, and Zen have different ways of construe the different stages of enlightenment, but they all hold that the realization of enlightenment means having the wisdom to view reality in its natural form. any sentient beings and dharmas are empty and free from the subject-object dualism. Once the individual understands the impermanence of reality, the individual has attained wisdom and therefore enlightenment. Non-duality Madhyamika, Yogacara, and Zen Essays -- Religion, Buddhis Buddhism first developed in India by Siddhartha Gautama as a means to end suffering. Nirvana could ultimately be achieved with adherence to the Four Noble Truths and the middle way. The Mahayana tradition arose within Buddhist with different inter pretations of Buddhas teachings and new ideals. It emphasized the role of the bodhisattva and the bodhisattva path as the means to attain enlightenment, or Buddhahood. The nature of the Buddha is no longer equivalent to that of the arhant, rather, he is beyond the level of the arhant he is a transcended being. Within Mahayana, Madhyamika and Yogacara philosophical schools developed in India and the Zen tradition arose once Buddhism spread to East Asia. While Madhyamika, Yogacara, and Zen emphasize several different concepts in an effort to attain enlightenment, all three adhere to the Mahayana doctrine of emptiness and non-duality. At the core of the Mahayana doctrine of emptiness lays in the early Buddhist belief in anatman, or no self. There is both a spiritual and material part to human nature, but it is the moral identity that survives death and is reborn (Prebish and Keown 56). The concept of anatman eliminates attachment to the material by claiming that an individual has n o real core, or soul, and the five skandhas, or aggregates of attachment, namely the material form, feelings, perceptions, mental formations and consciousness, provides evidence. It is held that none of the five skandhas are able to exist in the absence of the other four (Hershock). Desire is one of the main causes of suffering, and the five aggregates are the objects of desire. Dependent origination holds that everything is conditioned and lack intrinsic being of their own (Prebish and Keown 49)... ...anslation can be seen in translating emptiness. If emptiness is translated as upaya, or skillful means, then emptiness is a way of eliminating attachment to all views by criticizing them much like Nagarjuna does. Emptiness potentially can liberate or trap one further into greater conceptual illusions (Low 133). The trap occurs when the view is not is not ultimately true. Enlightenment is central to Buddhism it is a form of freedom. Madhyamika, Yogacara, and Zen have different way s of interpreting the different stages of enlightenment, but they all hold that the realization of enlightenment means having the wisdom to view reality in its natural form. All sentient beings and dharmas are empty and free from the subject-object dualism. Once the individual understands the impermanence of reality, the individual has attained wisdom and therefore enlightenment.

Non-duality: Madhyamika, Yogacara, and Zen Essays -- Religion, Buddhis

Buddhism first developed in India by Siddhartha Gautama as a means to shutting suffering. Nirvana could in conclusion be achieved with adherence to the Four Noble Truths and the middle trend. The Mahayana tradition arose within Buddhist with antithetic interpretations of Buddhas teachings and new ideals. It emphasized the character of the bodhisattva and the bodhisattva path as the means to disclose enlightenment, or Buddhahood. The nature of the Buddha is no longer equivalent to that of the arhant, rather, he is beyond the level of the arhant he is a transcended being. Within Mahayana, Madhyamika and Yogacara philosophic schools developed in India and the Zen tradition arose once Buddhism spread to East Asia. While Madhyamika, Yogacara, and Zen emphasize several different concepts in an effort to attain enlightenment, wholly three adhere to the Mahayana doctrine of emptiness and non-duality. At the core of the Mahayana doctrine of emptiness lays in the early Buddhis t depression in anatman, or no self. There is both a spiritual and material part to human nature, but it is the moral identity that survives death and is born-again (Prebish and Keown 56). The concept of anatman eliminates fond regard to the material by claiming that an individual has no real core, or soul, and the five dollar bill skandhas, or aggregates of attachment, namely the material form, feelings, perceptions, mental formations and consciousness, provides evidence. It is held that none of the five skandhas are suitable to exist in the absence of the other four (Hershock). Desire is one of the main causes of suffering, and the five aggregates are the objects of desire. Dependent origination holds that everything is lettered and lack built-in being of their own (Prebish and Keown 49)... ...anslation can be seen in translating emptiness. If emptiness is translated as upaya, or skillful means, then emptiness is a way of eliminating attachment to totally catchs by criti cizing them much like Nagarjuna does. Emptiness potentially can liberate or trap one further into greater conceptual illusions (Low 133). The trap occurs when the view is not is not ultimately true. Enlightenment is central to Buddhism it is a form of freedom. Madhyamika, Yogacara, and Zen have different ways of interpreting the different stages of enlightenment, but they all hold that the realization of enlightenment means having the wisdom to view reality in its natural form. All sentient beings and dharmas are modify and free from the subject-object dualism. at once the individual understands the impermanence of reality, the individual has attained wisdom and therefore enlightenment. Non-duality Madhyamika, Yogacara, and Zen Essays -- Religion, Buddhis Buddhism first developed in India by Siddhartha Gautama as a means to end suffering. Nirvana could ultimately be achieved with adherence to the Four Noble Truths and the middle way. The Mahayana tradition arose within Buddhist with different interpretations of Buddhas teachings and new ideals. It emphasized the role of the bodhisattva and the bodhisattva path as the means to attain enlightenment, or Buddhahood. The nature of the Buddha is no longer equivalent to that of the arhant, rather, he is beyond the level of the arhant he is a transcended being. Within Mahayana, Madhyamika and Yogacara philosophical schools developed in India and the Zen tradition arose once Buddhism spread to East Asia. While Madhyamika, Yogacara, and Zen emphasize several different concepts in an effort to attain enlightenment, all three adhere to the Mahayana doctrine of emptiness and non-duality. At the core of the Mahayana doctrine of emptiness lays in the early Buddhist belief in anatman, or no self. There is both a spiritual and material part to human nature, but it is the moral identity that survives death and is reborn (Prebish and Keown 56). The concept of anatman eliminates attachment to the ma terial by claiming that an individual has no real core, or soul, and the five skandhas, or aggregates of attachment, namely the material form, feelings, perceptions, mental formations and consciousness, provides evidence. It is held that none of the five skandhas are able to exist in the absence of the other four (Hershock). Desire is one of the main causes of suffering, and the five aggregates are the objects of desire. Dependent origination holds that everything is conditioned and lack intrinsic being of their own (Prebish and Keown 49)... ...anslation can be seen in translating emptiness. If emptiness is translated as upaya, or skillful means, then emptiness is a way of eliminating attachment to all views by criticizing them much like Nagarjuna does. Emptiness potentially can liberate or trap one further into greater conceptual illusions (Low 133). The trap occurs when the view is not is not ultimately true. Enlightenment is central to Buddhism it is a form of freedom. Madhy amika, Yogacara, and Zen have different ways of interpreting the different stages of enlightenment, but they all hold that the realization of enlightenment means having the wisdom to view reality in its natural form. All sentient beings and dharmas are empty and free from the subject-object dualism. Once the individual understands the impermanence of reality, the individual has attained wisdom and therefore enlightenment.

Police Deviance And Accountability Essay

Introduction The ethically ideal constabulary system would be one with fair play and nothing puzzling about it (i.e., there would be neither corruption nor bodge). at that place would be no us-against-them and no disrespect for the limits of the law or how its en pull backd. Everything done in private would be just as if it was done in common. (Anonymous)This is the probably an interesting view of ones vision for the law. arsehole this be achieved? is a question of utmost importance. The issue of jurisprudence misbehavior is a limiting factor in this dream of such an ideal law of nature force. Police optical aberration is a generic description of police incumbents activities that atomic number 18 inconsistent with the officers legal authority, organizational authority and standards of ethical conduct. Who indeed polices our police or what effective measures have been put in place to curb deviance among the police. The problem of police deviance is seen in the core det ermine of the police and modifying internal canvass touches would be effective in controlling deviance amongst the police such as allowing noncombatants interference into the internal suss out processes of the police force. Following Nelligan and Taylor (1994 59), who wrote that should police work be reorganized, patterns of misconduct atomic number 18 likely to changeThe actions of the police officers are controlled by a number of different rules and regulations which are written down in the criminal code and various police acts, some are undocumented and pull through in the expectation the police discussion section and society at large dictates for its officers.Police deviance is defined as a behavior that is inconsistent with the norms, values or ethics from either social standpoint. It has thus been described as a much broader term than corruption. The criminal code, which contains policing rules and precepts regarding the use of deadly force and policing, rules. The pol ice act adds rules governing neglect of duty, insubordination, discreditable conduct dressing .The society also has its own rules not formally soild but socially accepted and expected by citizens from officers such as police-citizen interaction, and maintenance of certain ethical standards.Any action that violates such laws is termed as police deviance. Ross (2003) sees police misbehaviors in two lights i.e. the officer willfully violating the law and the substance tolerating it. Deviance has been placed on the standard of police behavior, which can be derived from 3 perspectives i.e. ethical, organizational and legal. Ethical standards involve the police officers personal standards of moral oneness and responsibility. Organizational standards are the standards published by the police departments, police gores and commissions. Legal standards involve the laws of the community.How Does Deviance in the Force AriseThe Sherman typology distinguishes between levels of corruption that exist at different levels of the police department. The Rotten apple, rotten pocket theory holds that some police officers where unnatural before joining the force and upon admission into the force became the deviant ones in the police. The pervasive unorganized theory holds that there are deviant police officers within the force with no specific pattern of organization. mend the pervasive organized theory holds that there are deviant police officers with a specific pattern of organization.Whatever the origin of deviance, public safety cannot be assured and much of the deviance is seen due to lack of proper monitoring or effective control of internal systems and as such creates a discharge environment for the deviant officers to continue in their acts as seen in this story of Arthur McDuffie, an African American, was riding his motorcycle in Miami, when according to police reports he popped a wheelie, gave a cop the finger, and sped away. More than a dozen Miami patrol cars gave chase. When caught, at least six fresh officers jumped him, splitting open his skull. He died four geezerhood later. It came out at streak that the police fabricated an explanation that he fell splitting his head, of his own accord, but an all-white jury acquitted the officers. Three eld of racial rioting erupted. REASONS FOR POLICE DEVIANCEThe Shermans (1974) typology of police deviance attributed 8 factors responsible for police deviance.The large number of police officers thus increase the number of deviantsA lack of direct supervision, especially seen among police patrol where the police superiors or public are unaware of whats going on.The mixed task of policing which incorporates law enforcement, order maintenance and service functions and placing strict limits on the power of the police leading to misconduct.Both the discretionary power of the police and the record of the work provide police officers with numerous opportunities to partake in deviant behaviors.Contacts formed during the course of work with deviant and criminal subcultures can introduce the officer to devianceCode of secrecy that exists and leads to a cover-up of deviant behavior as substantially as new recruits been initiated to such a system.Police managers are part of the police subculture, having worked their way up the ranksPolice officers have a mentality of being underpaid and undervalued despite improved financial rewards to the police systemEfforts Carried fall outMuch effort has been put in place to curb police deviance, Much as been attributed due to public society effort such as the story of Rodney King, an African American, who was detected speeding on a Los Angeles freeway, but refused to stop for fear that he could be returned to jail. Over eleven LAPD units, including a helicopter, gave chase. last he stopped but refused to exit the vehicle, he was savagely dragged out, jolted twice with fifty thousand volts, and kicked or beaten with nightsticks at least fifty-s ix times by four white officers. Rodney suffered sixteen broken bones and permanent brain damage. The tape was then aired on television. The four white officers were initially acquitted of charges by a Simi Valley jury mainly white population. Five days of racial rioting erupted. A federal trial in 1993 then examineed the case and convicted two of the four officers. As seen above, the public had a great impact in the prosecution of the deviant police officers. The deviance amongst the police in Canada is much less than that of the United States and more so less numerous. Perhaps, Canadas most famous incident of police deviance occurred in 1974 when a corporal of the RCMP security and intelligence branch injured himself while planting a bomb outside a supermarket executives home. The cases of deviant police officers have mainly shown that police deviance most often occurred mainly for the selfish gain of these individuals probably driven by greed, guilt, revenge or lust and made pos sible by the lack of proper monitoring and a police department that is swift in covering its acts and thus protect these deviant persons.Policing The PoliceThe question of whether the police should be left alone to carry out is function has long been discredited and it is obvious that there is a need for a monitoring body. The accountability of police officers can be divided into 2 categories namely the internal look into process and the external review process. Internal review processes refers to the policies and procedures that exists in individual police department and are enforced through a chain of command and they include internal affairs, field of study boards and command and management supervision. External review procedures relate to agencies that are external to agencies that are external to police organizations which monitor police agencies such as police board, police commission and public inquiry. Civilian Review BodiesA civilian review body involves the creation of a group of civilians to review instances of alleged misconduct by the police. The police have often resisted this intrusion into what they deem their exclusive area of expertise as this civilian oversight compromises the secrecy needed by police departments. According to Rothwell and Baldwin (2007611) They agree that many officers believe that silence enables them perform their jobs more effectively and also avoids unnecessary public oversight. Despite this though the civilian review boards have gained widespread growth due also to public demand for accountability and have paid off tremendously.The aim of civilian review board is to provide police accountability and listed below are its objectives. To determine, whether individual complaints against an officer are true and to take appropriate corrective actionsTo identify patterns of misemploy doing by officers who are subject to a number of complainsTo demonstrate police credibility and responsiveness to the public by showing them grievances are taken seriously.This board is taking the bull by the horn as they form the aggrieved party and thus provide a strong motivation in performing their duty. There are some limitations to the civilian review board as they only have access to the cases that are reported and the help of the internal review process is needed. A reform that allows for the safety public is thus required also putting into consideration the need for police secrecy.Seagrave in her book Introduction to Policing in Canada lists 5 alternative models for dealing with this police deviance, she describes alternative models such as Externally supervised in house model where the investigation and adjudication of the complaint are undertaken by the police but at the end of the process, the entire procedure is reviewed by an individual external to the police department to ensure fairness in judgment by the police. Police investigation with independent adjudication model in which the investigation is comple ted by the police, but once completed, the adjudication is in the hands of a body independent of the police.Both models here allow the police process to be monitored. While the police argue that this probably is an intrusion into their secrecy and undermines their capabilities well as claiming that police individuals are well versed with the law and procedures as well as human rights.The public on the other hand understands that the police are also humans and are thus capable of making judgmental errors along with the different moral values shown by various police individuals as depicted a study reported by Terry and Reisig (2003) It was found that police officers are significantly more likely to use higher(prenominal) levels of force when suspects are encountered in disadvantaged neighborhoods and those with higher homicide rates, net of situational factors (e.g., suspect resistance) and officer-based determinants (e.g., age, education, and training). Also found is that the effect of the suspects race is mediated by neighborhood context. Also following the rotten apple theory of police deviance, it is probable that some of the deviant police officers are in the force and may have worked their way up to top ranking positions, thus if they are left unsupervised, they pose as the rotten of the police force. By view of reforms to ruffle some external processes into internal review processes, public safety can be ensured.Accountability in The police The police are a public enforcement agency allowed to use deadly force. It is thus necessary that accountability measures be put in place. The accountability of the police is based on the premise that the state has a duty to provide a fair and equitable service to the public. The police are accountable to number of different groups such as the politicians, lawyers, common public etc. A police individual can be held accountable for his/her action or the police department can be held accountable for the action of its members.Assessing AccountabilityHow does one therefore assess the accountability of the police? An administrative way takes into consideration the effectiveness and the efficiency. Effectiveness ascertains such things such as crime and arrests rates, number of calls for service, reports etc. while efficiency takes into account how resources are used by the organization Both internal review processes and external review processes are bear on in monitoring police accountability, while the internal process monitors internal accountability, the external review processes involves bodies outside the police such as the police boards, public enquiries and police commissions. The external review processes are mainly involved in administration of police and the police laws and are not involved with deviant behaviors. Thus much of the police deviances are handled by the internal board which does not handle these cases well.Summary.Much has been mentioned about police deviance, the internal re view process has played its part but is still ineffective and argues that civilians should not be involved with police matters due to invasion of secrecy. It is in view that civilian interference into internal police affairs has helped in instances such as the Rodney King incident to combat deviances in the force.Works CitedHeck WP Police Who Snitch deviate Actors In A Secret Society,Deviant behavior 13 (3) 253-270 JUL-SEP 1992Klinger DA Negotiating Order In Patrol Work An Ecological Theory Of Police solvent To Deviance, CRIMINOLOGY 35 (2) 277-306 MAY 1997Nelligan.P Taylor.W.Ethical Issues in Community Policing Journal Of Contemporary Criminal Justice, vol. 10, no. 1, pp. 59-66, February 1994.Ross, Darrell L, Book Review Readings on Police Misconduct and Police ethicsCriminal Justice Review, vol. 28, no. 2, pp. 382-395, September 2003Rothwell.R. Baldwin. J Whistle-Blowing and the Code of Silence in Police Agencies Policy and Structural Predictors Crime & Delinquency, vol. 53, no . 4, pp. 605-632, October 2007Terrill W, Reisig MD region context and police use of forcejournal of research in crime and delinquency 40 (3) 291-321 AUG 2003

Class Inequality and Poverty as seen by Marx, Weber, and Lewis Essay

Our society today is currently experiencing a widening of the gap between the abstruse and the scummy. As the saying goes, the rich is get richer and the poor is getting poorer, our society attests to such truth, where the wealthy is gaining more money while the poors solecism is getting worse by the minute. Poverty is a big problem ever since the dawn of man. In an ideal world, the number of resources produced could feed more than every of the hungry mouths all over the world. But in veracity, wealth is not distributed properly to every living individual. There be those who get more as comp atomic number 18d to those who get less or get nothing at all.The sad realityIf you take into consideration every living individual in a certain community, only a small fraction of its population enjoy living a well-off living, and a majority suffer from lack of resources or doesnt dupe enough to fill their stomachs. A fraction of imbalance in the distribution of resources and wealth af fects a greater number of mickle, wherein the sad reality lies on whom are the ones getting a lot and who are the ones gaining a lot. This is the sad reality in our society, where people thrive in a world make full with inequality and sadly, majority of the people suffer from the extra gains of some people. Class inequality can be traced way back in the history of men, when people learned to lineify themselves, making some superior and some, well, rather inferior.Another sad reality is that the ones who are in the higher echelons of the society are the ones who are not doing actual hard labor. These people are the ones capitalizing from the hard work of the poor running(a) class, exertioning their lungs out, literally giving their sweat and blood conscionable to make money.This labor force is the one who is actually earning the money it is their effort and strength that makes the real cash, not the ones bossing them around. But the harshness of life is reflected in this bert h the ones working hard gets paid less, barely enough to make a living out of it, while the ones bossing everyone around gets a frequently bigger share, wherein they have exerted minimal or no real effort in doing so. This is the present situation of the working class of the past, the present, and maybe of the future.There are some great thinkers who have pondered on these things so to speak. This people, though separated by different views, expressed their opinions about how inequalities in the classes happen and why poorness exists, depending on how they see the situation. Their take on the realities are reciprocated by approval or by rejection from the people looking at their ideas. Some may face radical to others, but some deem that is the necessary thought for that certain specific topic. These great thinkers include Karl Marx, Max Weber and Oscar Lewis.Karl Marx viewsFor Karl Marx, poorness is the outcome of the rampant class inequality that the society is suffering today . The working class, whom Karl Marx advocates, is the ones who are actually earning the money for the society. They are the ones who actually deserve to get much of the gains, rather those who are capitalizing from their labor. Marx stressed that capitalists are the ones bringing disarray in the society because they are actually contributing lesser work as compared to the laborers, yet they are getting most of the gains. In order to correct this, Marx strongly advocated the abolishing of capitalism and replaces it with communism. For him, it could be a way to alleviate poverty in the society today, rather than just letting the capitalists sit around and wait for the harvest of their moneys fruit, rather than giving the laborers the real fruits of their labors.In Marx belief, capitalism has been the root of the great class divide, the widening gap between different social strata, where the poor and the rich are distinctively a assort from each other. This is because of the fact that a great leave of the gains goes to the pockets and the bellies of the capitalists, who are theoretically getting even richer, the fact that they are the ones who have the money. On the other hand, the laborers, the ones who are exerting greater effort as compared to these capitalists, are not getting anywhere the definition of rich at all, hence, they are having the difficulty to cope with the increasing cost of living, and so worsening their status, with them experiencing the poor is getting poorer furcate (Hallas, 2002).Looking closely at Marx ideas, you could see that it could also be about freedom. It is being able to freely produce and receive what is rightfully yours, as for the part of the laborers, for their efforts, their hard work to be reciprocated with enough pay. It is about how the true money-earners the laborers, be able to control various circumstances that could benefit them, and not the capitalists. They bequeath be able to create a free society where their ha rd work will be equal to a good life for them and their families. Because of this, the society will be a better place as conceived by Marx. It will be an exploitation-free society, in the same time it will do away with oppression, racism, unemployment, war, from poverty and inequality.Max Webers viewsMax Webers idea revolved on the role of an authority when it comes to the distribution and allocation of the national resources. He also stressed out that the wealth of the country, the nations riches, came from the bureaucratic organizations present. They are clearly the ones influencing the allocation of these resources because as Weber sees it, they were the producers, not the common working class. His main idea stated that bureaucracy, an organizational arrangement of the people themselves, is to administration as compared to machine which is for production. Weber defines bureaucracy as an institutional method wherein the rules are applied to certain specific cases, thus justifying the governments action as being fair and really predictable (What Is bureaucracy? 2004).For Weber, poverty was not essentially a natural situation or condition. The situation of poverty could be broken, wherein the social status of the people could be alleviated from the poor to the not-so-poor, thus implying a chance for people to develop. But if you see the definition of poverty as being relative, there could hush up be people thriving downstairs the poverty line. This is because of the margin of difference from the rich and the poor are also changing. But if you look closely, their way of life, their social standings, their lifestyles had been changed. Even though they are still considered to be poor, relative to the rich people, they are able to alleviate their way of life out of the slums and were able to live a normal and healthy lifestyle.Oscar Lewis viewsthe Statesn born anthropologist Oscar Lewis created the social theory about the culture of poverty. This concept of soc ial classifications justify the positioning of the poor in the society, wherein the concept explains that the poor people have a different value system. Because of this, the theory suggests that the poor are slumped in the situation of poverty because they are continually adapting from the burdens of poverty.For Lewis, the poor became the poor because they were transformed by poverty. Poverty became a standard in classifying a persons social status, thus implying that the definition of being poor is relative. It depends on how you look at it. Being poor doesnt necessarily mean that you are not eating well, not being able to enjoy life as much as others can, etc. etc. Being poor entail being placed in the lower part of the poverty line. If there are a lot of rich people, the poverty line could be changed, thus some of the rich people may be considered as poor (Burt, 2004).American situationThe most applicable principle in the United States of America was the contribution of Oscar Lew is. The quality of life in America is far better than other countries in the world, yet there are still some poor people. This is relative to Americas situation as compared to the situation of another country. There is a possibility that a rich person in another country, when he goes to America, he will be considered poor.Another possibility could be that when a poor man in America goes to another country, he could be considered as rich. Lewis introduction of a culture of poverty could be applied in Americas situation, wherein the concept of the poor is just a creation of the concept of poverty. Creating an underclass could have resulted to the introduction of a higher class, thus there was a basis for comparison of the different classes that exist in a society. The poor existed because of the rich peoples existence and vice versa.Burt, D. S. (2004). Oscar Lewis. Retrieved February 21, 2007, from http//www.answers.com/topic/lewis-oscarHallas, D. (2002). The legacy of Karl Marx. Retr ieved February 21, 2007, from http//www.socialistworker.org/2002-2/423/423_08_HallasOnMarx.shtmlWhat Is Bureaucracy? (2004). Retrieved February 21, 2007, from http//www.semp.us/biots/biot_145.html

How Effective Was Victorian Policing?

When jurisprudence forced were first set up in the earlier nineteenth snow, they were very unpopular. This was due to the fact the police were criticised for violent and drunken behaviour. Furthermore such as the cost of running the police force and the semipublic feared them as a threat to their personal and political freedom. For example, the police didnt solve any crime the lack of protection and mainly many places did not have a police force until 1856, which meant that there was no point having them because it contrasted greatly with the population.One point historians find that Victorian policing was a failure is that most of the magazine the police spent clearing drunks and beggars off the street, and not solving serious crime, such as only four numbers of arrests were made in 16 years. Late Victorian England is described by some historians as a golden age of policing because of the amount of public trust and approval.There were reforms which meant that there were less de glutition in the force and the public approved the police were seen more as a friend than threat. Also the people thought it seemed worth it to run the police force. This was because the police force was starting to realise their mistake and learned from it. There was an increase in the number of arrest the police made and the crime stride began to steadily fall.Furthermore they started to gather evidence from the public and made prosecutions, which suggests the police were taking action and tried to solve crimes. In addition there were new technologies-this frame was to classify information more efficiently. But historians also ask whether this really was a golden age. For example the Bertillon system was difficult to use, therefore there was no much point to use them unless a witness could give detailed descriptions of the criminal.One major point that proves the Victorian policing was a failure is in the nineteenth century police officers werent trained enough. Overall, to some extent the Victorian policing were effective in that they learnt from their mistakes and kept improving, but to some extent it wasnt effect in preventing criminals effectively or solving crimes. However in my opinion the Victorian policing were effective in the way that if the mistakes werent made, wed be faced with the akin problems now.

The Doha Round and Financial Services Negotiations

The outstanding of Qatar heartbeat and pecuniary Services Negotiations AEI STUDIES ON SERVICES TRADE NEGOTIATIONS Claude Barfield, series editor THE expectant of Qatar ROUND AND pecuniary SERVICES NEGOTIATIONS Sydney J. Key INSURANCE IN THE GENERAL AGREEMENT ON TRADE IN SERVICES Harold D. Skipper Jr. LIBERALIZING world-wide TRADE IN ENERGY SERVICES ray of light C. Evans REDUCING THE BARRIERS TO INTERNATIONAL TRADE IN ACCOUNTING SERVICES integrityrence J. White The Doha Round and fiscal Services Negotiations Sydney J. Key The AEI Press Publisher for the American Enterprise Institute WA S H I N G T O N , D . C . 2003Available in the United States from the AEI Press, c/o Client Distribution Services, 193 Edwards Drive, Jackson, TN 38301. To order, call toll free 1-800-343-4499. Distributed outside the United States by arrangement with Eurospan, 3 Henrietta Street, London WC2E 8LU, England. Library of Congress Cataloging-in-Publication Data Key, Sydney J. The Doha round and fisca l serve negotiations / Sydney J. Key. p. cm. Includes bibliographical acknowledgements and index. ISBN 0-8447-4182-5 (pbk. ) 1. Financial supporter industryLaw and legislation 2. Foreign pile pattern. I. Title K1066.K49 2003 343. 087dc 22 2003063553 3 5 7 9 10 8 6 4 2 Printed in 2003 by the American Enterprise Institute for Public Policy Research, Washington, D. C. The views expressed in publications of the American Enterprise Institute atomic number 18 those of the authors and do non necessarily reflect the views of the staff, advisory panels, officers, or trustees of AEI. The views expressed by the author in this publication should non be interpreted as representing the views of the Board of Governors of the landed estateal Reserve System or any unrivalled else on its staff. Printed in the United States of America Contents QFOREWORD, Claude Barfield ACKNOWLEDGMENTS 1 2 INTRODUCTION INTERNATIONAL TRADE IN monetary SERVICES E-Finance 6 Modes of Supply 7 Services Provided a cross Borders 8 Foreign Direct Investment 9 Presence of Natural Persons 9 repose AND REGULATION Three Pillars of Liberalization 12 National Treatment and Market Access 13 Nondiscriminatory Structural Barriers 15 Freedom of dandy Movements 18 fortify Domestic Financial Systems 20 Minimum Standards and Codes of Good Practices 22 Surveillance 23 The Prudential Carve-Out in the GATS 24 NATIONAL TREATMENT AND MARKET entre Binding Existing and Ongoing Liberalization 28 IMF Conditionality 30 Permanence of GATS Commitments 31 Foreign Direct Investment 32 Remaining Barriers to Entry and effect 33 MFN Exemptions 34 Barriers at bottom the Scope of the Prudential Carve-Out 35 Cross-Border Services 37 Binding Gaps versus Remaining Barriers 38 Uncertainty about WTO Jurisprudence 39 v sevener xiii 1 4 3 11 4 27 vi CONTENTSMore Liberal Approaches for Wholesale Services 39 Evolving regulative Responses to Retail Cross-Border Services 40 Negotiating Goals 41 5 NONDISCRIMINATORY STRUCTURAL BAR RIERS Regulatory Transpargonncy 44 Rules about Developing and Applying Rules 44 Sound Financial Systems 46 Effective Market Access 47 General Anti combative Measures 49 Necessity and Domestic Regulation 50 Recognition of Prudential Measures 51 Harmonization 52 Facilitating Access 52 The Intra-EU Approach 53 Remaining Second-Pillar Barriers 54 Applicability of the Intra-EU Approach 55 CONCLUSION 43 6 57 61 87 101 107 NOTES REFERENCES INDEX ABOUT THE AUTHOR Foreword Q In advanced industrial economies, the serve firmament accounts for a substantial portion of distributively kingdoms gross issue product.Despite the increasing importance of occupation in go, the General placement on mess in Services (GATS), which was negotiated during the 198694 Uruguay Round and entered into force in January 1995, marked the first time that rules for opening marts in run were included in the three-way trading remains. The GATS called for periodic negotiating rounds, beginning no later than 2000, to achieve further loosening of trade in dishs. Serious individual sector negotiations, however, did not shift into high gear until a cosmopolitan advanced round of multilateral trade negotiations was launched at the November 2001 ministerial meeting of the World Trade Organization (WTO) in Doha, Qatar. The American Enterprise Institute is sedulous in a research project to focus on the latest round of trade negotiations on renovations.Mounted in conjunction with the Kennedy School of Government at Harvard University, the Brookings Institution, and the Coalition of Service Industries Research and Education Foundation, the project entails analysis of individual frugal sectors pecuniary services accounting insurance electronic commerce energy air freight and air cargo airline passenger services and entertainment and culture. Each study identifies major(ip) barriers to trade liberalization in the sector under scrutiny and assesses policy options for trade negotiators and interested private sector set forthicipants. AEI would like to acknowledge the following donors for their generous support of the trade-in-services project American present Company American external Group CIGNA Corporation FedEx Corporation Mastercard International the Motion Picture Association of America and the Mark Twain Institute. I emphasize, however, that the vii viii FOREWORD conclusions and recommendations of the individual studies ar solely those of authors.Issues for the Financial Services Negotiations In this study, Sydney J. Key analyzes the role of the GATS and the WTO in the liberalization and regulation of the pecuniary services sector and identifies six broad goals for the monetary services negotiations in the Doha round. What overhears her analysis unique is that she integrates the two very different perspectives of trade policy and pecuniary regulative policy. Throughout the study, Key emphasizes the complementary and mutually reinforcing relationship amongst suits to open markets under the GATS and the intensive ongoing outside(a) work on alter house servant financial systems, including prudential regulation and supervision.The study examines the role of the GATS and the WTO in relation to what Key characterizes as the three pillars of liberalization necessary to achieve external contestability of markets (1) opening markets to outside services and service suppliers by path of GATS ladings to provide national treatment and market entrance fee (2) implementing interior(prenominal) structural reforms that would eliminate nondiscriminatory structural barriers to trade in financial services and (3) liberalizing capital movements. Key explains that the GATS deals with third-pillar liberalization only insofar as it affects countries doweryicular(prenominal) commitments to liberalize trade in services in general, liberalization of capital movements is a matter of concern for the International Monetary Fund (IMF).Key emphas izes the importance of focvictimization on fundamental first-pillar liberalization in the Doha round financial services negotiations and sets forth four first-pillar goals first, binding in the GATS existing and ongoing liberalization that provides market access and national treatment second, removing be barriers to national treatment and market access and binding the resulting liberalization third, narrowing or withdrawing the broad exemptions that some countries make taken from the most favored nation (MFN) obligation of the GATS and, fourth, using an incremental approach for cross-border services that combines strengthening GATS commitments and achieving great liberalization in practice. CLAUDE BARFIELD ix How far should the Doha round financial services negotiations fit into the realm of second-pillar liberalization?Like separate authors in this series, Key grapples with the role of the GATS with check to the home(prenominal) structural reform take awayed to dress or el iminate nondiscriminatory structural barriers to trade in services. Key believes that the Doha round financial services negotiations should proceed selectively by concentrating on the areas in which the GATS and the WTO have a comparative advantage. She singles out two particularly cardinal second-pillar goals for the Doha round financial services negotiations exploitation stronger GATS disciplines on regulatory transparentness and removing barriers to effective market access and binding the resulting liberalization.Key argues that GATS rules on transparency in developing and maintaining regulations, together with the closely related principle of adjectival fairness in consecrateing regulations, would not only help eliminate barriers created by opaque and unfair regulatory procedures but also help get a line that a area does not use its regulatory border to undermine its commitments to national treatment and market access. Key explains how GATS rules on transparency in f inancial services regulation could twain complement and build upon the work on transparency that is part of transnational motilitys to strengthen domestic financial systems. The opposite second-pillar goal set forth by Key involves anticompetitive domestic regulatory measures that cannot be justify on prudential grounds and serve primarily to keep exotic financial firms from competing in host- acres markets by making immersion impractical or too costlythereby denying them effective market access. Key explains that identifying barriers to effective market access that could be negotiated in the Doha round requires a countrys trading partners to determine whether, in practice, a host countrys measures keep impertinent firms from competing in its markets and whether a critical mass of regulators believes that the measures are inappropriate for prudential purposes. She points out, however, that even if the prevalent regulatory view is that the measures cannot be justified on prude ntial grounds, host-country regulators must(prenominal) be persuaded to accept it. What about barriers to trade in financial services that are created by legitimate prudential measures? Key explains the importance of the prudential carve-out for domestic regulation in the GATS arrogate on Financial x FOREWORDServices it ensures the GATS will not interfere with the ability of national politics to exercise their responsibilities for prudential regulation and supervision to protect consumers of financial services and to kick upstairs the integrity and stability of the financial system. She notes that while prudential measures sometimes impose additional requirements on foreign firms, they may also create barriers simply because they differ among countries that is, financial firms operating on a global basis may ofttimes find it heavy to comply with a multitude of different national rules. Key identifies two approaches for dealing with barriers created by prudential measures.One would have home-country regulatory authorities convince host-country authorities that their prudential concerns can be addressed with less sweeping requirements. These efforts could take place bilaterally or in various internationalist fora, including the financial services negotiations under the auspices of the WTO, where finance ministries play a major role. A second approach would have home- and hostcountry authorities negotiate a recognition arrangement. Although the GATS Annex on Financial Services facilitates unilateral or mutual recognition of prudential measures by permitting a departure from the MFN obligation of the GATS for much(prenominal) arrangements, Key explains why the WTO is not the appropriate forum for their negotiation.In conclusion, Key summarizes the forces affecting the outcome of the Doha round financial services negotiations and the importance of that outcome to the process of financial sector liberalization Success in achieving the financial services go als discussed in this study depends significantly on factors beyond the scope of the negotiations. As the GATS explicitly recognizes, liberalization of trade in financial and other services is an ongoing process. For financial services, this process is being driven in large part by market forces and natural technologies. It is also being driven by the growth recognition among policymakers that market opening can benefit host-country consumers of financial services and, at the same time, open to the resiliency of domestic financial systems.The development of international minimum standards and codes of rock-steady practices for sound financial systems and their implementation by individual CLAUDE BARFIELD xi countries provide a strong foundation for moving ahead with further liberalization of trade in financial services. The negotiations in the Doha round can play an all-important(prenominal) role in helping to accelerate the process of liberalization as wellspring as solidifyi ng its results in the form of binding commitments subject to the WTO controversy settlement mechanism. CLAUDE BARFIELD American Enterprise Institute for Public Policy Research Acknowledgments Q The author greatly appreciates the assistance of the many individuals who read all or part of the manuscript and provided valuable comments and suggestions in their areas of expertise.She would like to thank Alistair Abercrombie, Claude Barfield, Nicholas Bayne, Stijn Claessens, Steven Fabry, Bernard M. Hoekman, Cecilia Klein, Masamichi Kono, Robert D. Kramer, Patrick Macrory, Ann Main, Marilyn L. Muench, Kathleen M. ODay, Patrick Pearson, Mary S. Podesta, Amelia Porges, Peter E. W. Russell, Hal S. Scott, Richard E. Self, Jonathan D. Stoloff, and T. Whittier Warthin for reading the manuscript in its entirety. She would also like to thank Peter Berz, Barbara J. Bouchard, James M. Boughton, David T. Coe, Kenneth Freiberg, Ralph Kozlow, Ross B. Leckow, Michael D. Mann, Juan A. Marchetti, Peter K. Morrison, William A. Ryback, David Strongin, Mark W. Swinburne, Andrew Velthaus, and Obie G.Whichard for reading drafts, and often redrafts, of particular sections. Finally, the author would like to thank Juyne Linger for her work in editing the manuscript. xiii 1 Introduction Q The General Agreement on Trade in Services (GATS), the first global trade agreement to cover financial and other services, is an important sweet element in the international framework for liberalization and regulation of the financial sector. Participation in the GATS, however, does not necessarily mean that a country has made strong commitments to open its markets to foreign services and service suppliers. Indeed, the strength of commitments varies substantially among countries.The GATS thusly requires periodic negotiating rounds on financial and other services to ameliorate commitments and thus achieve a progressively higher level of liberalization. 1 The GATS was negotiated in the Uruguay Round, whi ch was launched in 1986 and formally concluded in April 1994. 2 Financial services, however, was one of several sectors for which negotiations on particul rised commitments were extended, and final agreement was not reached until December 1997. 3 In 2000, in accordance with the deadline established by the GATS for initiating a new round of services negotiations, work began again on financial and other services. This occurred despite the failure of the Seattle ministerial meeting of the World Trade Organization (WTO) in December 1999 to launch a comprehensive new round of trade negotiations.Subsequently, at the Doha ministerial meeting in November 2001, WTO atoms reached agreement on an agenda for comprehensive multilateral trade negotiations that in mergedd the alleged(prenominal) built-in agenda for financial and other services. 4 The ministerial declaration set January 1, 2005, as the deadline for end the Doha round the declaration called for the bordering ministerial meeting, subsequently scheduled for September 2003 in Cancun, to assess progress and provide any necessary semipolitical guidance. 5 1 2 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS For financial services liberalization, four aspects of the GATS and the WTO are particularly significant First, the WTO is a multilateral forum in which the primary goal is reducing or eliminating trade barriers to promote competitive markets and thereby support economic growth and development.The new blow of this goal at the multilateral level complements the intensive work on strengthening domestic financial systems in a variety of other international fora, ranging from institutions much(prenominal) as the International Monetary Fund (IMF) to specialized bodies such(prenominal) as the Basel Committee on Banking Supervision. 6 Indeed, the efforts to liberalize trade in financial services and the efforts to strengthen domestic financial systems, including prudential regulation and supervision, are mutu ally reinforcing. In addition, the WTO is a forum in which all members have the fortune to participate on an equal basis. Multilateral trade agreements are negotiated in the WTO without the conditionality that links IMF or World Bank financial assistance to the implementation of specialised policy measures by a borrowing country. In principle, therefore, GATS commitments to liberalization have domestic self-commandthat is, they reflect a countrys recognition of the need for policy reforma whole step that the IMF has found to be a crucial determinant of the success of its programs. 8 Second, the GATS provides a mechanism for parties to undertake legally binding commitments subject to enforcement under the WTO difference settlement mechanism. A GATS commitment is permanent in that it cannot be withdrawn without compensation of trading partners. Failure to adore a commitment could open a country to a dispute settlement proceeding and, ultimately, WTO-sanctioned retaliatory measu res by its trading partners. Thus, backsliding in the take care of protectionist domestic political pressures could be extremely costly. As a result, binding even the status quo is extremely important.Moreover, for negotiations that stretch over many years, the status quo in the final phase is often different from that at the outset of the negotiations, in part as a result of the negotiating process itself. Third, the GATS is based on the most-favored-nation (MFN) principle, which precludes discrimination among foreign countries. Under the MFN obligation of the GATS, a WTO member must accord to services and INTRODUCTION 3 service suppliers of any other member treatment no less favorable than the treatment it provides to like services and service suppliers of the most favored foreign nation. 9 The reach of the MFN obligation is very broad ecause it applies to all measures affecting trade in services that are covered by the GATS, not just those for which a member has made specific co mmitments to liberalization. 10 Although the GATS does allow members to enter into economic integration agreementssuch as the Treaty establishing the European Community (EC Treaty)11 and the North American Free Trade Agreement (NAFTA)without extending the benefits of the agreements to all WTO members, it establishes stringent criteria for an agreement to qualify for this exception. 12 If a WTO member undertakes liberalizing measures in connection with services obligations in an agreement that does not meet the criteria, it must apply the measures to all WTO members on an MFN basis. 3 Fourth, the GATS negotiating process can itself have a positive impact on domestic policymaking, particularly in rising market economies and other developing countries. Governments that participate in the negotiations are forced to account to their trading partners for the barriers they impose and to explore the possibility of overcoming domestic political constraints to reduce or eliminate those barri ers. A continuing challenge for the trading partners is to use the GATS negotiating process to provide support for and to harness political and market forces that are creating pressures for liberalization within a host country. In this regard, a countrys readiness for reform is critical. Thus, the outcome of the GATS process depends heavily on factors beyond its purview.The next chapter of this study presents a brief discussion of the international planning of financial services and their coverage by the GATS. The third chapter provides a framework for analyzing the role of the GATS and the WTO in liberalization and regulation of the financial sector. The fourth chapter focuses on the barriers to national treatment and market access that need to be addressed in the financial services negotiations in the Doha round. The fifth chapter examines nondiscriminatory structural barriers and identifies certain areas of domestic structural reform that could usefully be dealt with in the GATS negotiations. The final chapter presents the conclusions of this study. 2 International Trade in Financial Services QThe financial sector is a critical component of a nations prudence It not only contributes instantaneously to output and employment but also provides an essential infrastructure for the functioning of the entire economy. The financial system serves as a channel done which nest egg can be mobilized and use to finance investment and, at the same time, facilitates proceeding necessary for internal and external trade. It also helps to manage risks and reduce so-called information asymmetries between providers and users of funds. 1 For these reasons, a sound and efficient financial system is imperative for economic growth and development. A sound financial system also increases the resiliency of a nations economy, thereby helping it to withstand external shocks such as movements in exchange rates or a major increase in global interest rates.International trade in fin ancial servicestogether with enhanced prudential regulation and supervision and other basic structural reformscan play an important role in helping countries build financial systems that are to a greater extent competitive and efficient, and therefore more stable. Financial services trade can enhance capital market efficiency improve the quality, availability, and pricing of financial services stimulate creative use by fashion of the dissemination of new technologies, know-how, and skills and promote the use of international good practices in areas such as accounting, risk management, and disclosure of financial information. 2 The fast growth of trade in financial services in recent years reflects a combination of economic, technological, and regulatory factors. These include new and expanding markets in developing and transition economies, technological advances, and progress in reducing or eliminating a variety of host-country barriers (see chapter 3). 4 INTERNATIONAL TRADE IN FINANCIAL SERVICES 5 Trade in services, as defined in the GATS, includes services provided across borders and through with(predicate) foreign rule investment. The cross-border prep of servicesfor example, the supply of financial services from an office located in one country to residents of another country is by and large analogous to trade in goods. 4 By contrast, foreign direct investment involves the establishment of a moneymaking(prenominal) aim, such as a branch or subsidiary, within a host country. 5 The GATS approach of be international trade to nclude services provided to host-country customers through the establishment and operation of a commercialized front differs from the approach utilize for balance-of-payments purposes, in which once a topical anaesthetic anesthetic branch or subsidiary has been established, the services it provides to host-country customers are treated as domestic. 6 In this study, the term financial services refers to financial service s other than insurance, which is the subject of another study in this series. 7 Although the GATS commentary of financial services encompasses both insurance and insurance-related services and banking and other financial services (excluding insurance),8 they have been negotiated and listed in the financial services schedules as separate subsectors. 9 These subsectors are, however, closely linked.Many of the major commercial and investment banks operating internationally are part of financial conglomerates that also include firms engaged in insurance underwriting, and banks often engage directly in insurance brokerage activities. Moreover, the development of new types of products and instruments is blurring the differentions between financial subsectors. Major financial firms now provide a wide range of financial services to customers in other countries. These include commercial banking activities such as bestow and deposit-taking investment banking activities, such as underwritin g securities and advising on mergers and acquisitions trading activities, that is, brokering and dealing in securities and other financial instruments and asset-management activities, including management of mutual funds and award funds.Other financial services provided internationally include financial information and data processing services investment advisory services payment and money contagion services, including credit cards settlement and clearing for financial assets and financial leasing. 6 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS Many financial services provided internationally are wholesale in nature that is, they are provided to sophisticated customers such as corporations and institutions, other financial services firms, and wealthy individuals. 10 Both foreign direct investment and cross-border run are important means of providing wholesale financial services.In the banking sector, when wholesale services are provided through establishment of a commercial presence, direct branches of the foreign bankif permitted by host-country regulationare usually a more efficient form of organization than subsidiaries. Unlike subsidiaries, branches are not separately incorporated in the host country and operate using the firms consolidated worldwide capital (but see chapter 4 regarding lending limits based on branch capital-equivalency requirements). E-Finance Technological advances have long had a major impact on the contribute of wholesale financial activities. Business-to-business electronic transactions within the financial sector have been used for more than two decades, both domestically and internationally.Financial firms have also provided online services to nonfinancial firms over close proprietary networks for a act of years. Widespread access to the open network technology of the Internet, however, offers a whole new range of possibilities to provide services to a much broader base of customers at substantially lower costs. As a resu lt, online services provided to wholesale customersboth within and across national bordersare growing rapidly. This growth includes not only traditional financial services but also new types of services designed to facilitate business-to-business e-commerce activities. 11 The same technological and cost-saving possibilities exist for the provision of electronic banking and other financial services to retail customers.Within some countries, the provision of some types of financial services over the Internet and through weathervane-enabled technologies, such as mobile telephony, is expanding dramatically. Prominent examples include discount brokerage and mutual funds in the United States, and banking services in Finland, Norway, and Sweden. 12 The cross-border provision of INTERNATIONAL TRADE IN FINANCIAL SERVICES 7 financial services to retail customers over the Internet, however, is still in its infancy. In general, the international provision of retail financial services still tak es place primarily through locally incorporated subsidiaries. 13 Indeed, a number of banks are now using their host-country subsidiaries as a base from which to provide electronic banking services to host-country retail customers.The pretermit of widespread development of cross-border retail banking and other financial servicesthrough the Internet or more traditional methodsreflects host-country regulatory requirements aimed at ensuring adequate consumer protection, consumer preferences, and tax considerations. Some countries actually require the establishment of a commercial presence to provide retail financial services. thus far when regulatory requirements for cross-border services involve nondiscriminatory application of host-country prudential standards, firms operating on a global basis may have difficulty meeting a multitude of different national requirements. Perhaps even more important, consumers may prefer dealing with a local commercial presence, particularly because re dress against a local establishment is usually readily available through the domestic legal system.In addition, in a number of countries, consumers receive more favorable tax treatment on financial products that are provided through locally incorporated entities. 14 Modes of Supply In an effort to include all of the ways in which services are provided internationally, the GATS defines trade in services in terms of four so-called modes of supply. Mode 1 and mode 2 cover services provided across borders for financial services, the distinction between these two modes is not always clear. Mode 3 covers services provided through establishment of a commercial presencethat is, through foreign direct investment, a term that is not used in the GATS.Mode 4 covers services provided through the impermanent presence of natural persons, which includes nonlocal employees of a foreign service provider. The GATS uses modes of supply not only to define the scope of its coverage but also as the basis for specific commitments to liberalization that WTO members undertake. 8 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS Services Provided across Borders. In this study, the term cross-border services is used broadly without attempting to assign a geographic location to the transaction. Thus, this study does not attempt to determine whether a transaction takes place in the country of the service provider or in the country of the customer.For example, a cross-border financial services transaction could be carried out in a number of different ways (a) a representative of, say, a foreign bank might visit the country of the customer to arrange a loan (b) the customer might travel abroad to visit the office of the foreign bank or (c) the transaction might take place via telephone, fax , or, increasingly, the Internet, which, in this context, is simply another technological means of delivering the service. 15 The GATS, however, distinguishes between services provided to nonresidents from the country of the service supplier (mode 1 or crossborder supply) and services provided in the country of the service supplier (mode 2 or consumption abroad). Usuallybut as currently defined by the GATS, not necessarilymode 2 involves physical movement of the consumer, such as the movement that occurs in tourism. 6 For financial services, however, the line dividing these two modes of supply is not always clear, especially in the case of example (c) in the former paragraph. Indeed, because financial services are intangible, assigning a geographic site to their provision across borders is difficult and often arbitrary and will become more so as the importance of e-finance increases. From a regulatory perspective, a major issue is whether, and to what extent, the rules of the host countrythat is, the country of the customerare applied to the cross-border transaction. 17 Suppose, for example, that employees of a foreign bank visit the host country to arrange cross-border loans.Ev en when the host country does not have a regulatory framework in place for cross-border banking services, host-country bank regulators sometimes look at factors, such as the frequency and duration of visits and the permanence of the host-country infrastructure for the visiting employees, to determine whether, for regulatory purposes, the cross-border activity rises to the level of a host-country office. 18 Or suppose that a foreign broker-dealer solicits host-country customers to purchase securities. Securities regulators often use solicitation in addition to the actual conduct of business with domestic residentsas INTERNATIONAL TRADE IN FINANCIAL SERVICES 9 criterion for determining whether the foreign firm is subject to hostcountry broker-dealer adjustment requirements. 19 In response to the increasing use of the Internet by the securities industry, a number of regulators also examine factors such as whether a web site is being used to target host-country customers (see chapter 4 ). 20 Besides regulatory jurisdiction, another important jurisdictional issue scrape ups in the event of a dispute here the question is which countrys courts have jurisdiction to try the case and which countrys laws apply. 21 Foreign Direct Investment. The inclusion of foreign direct investment in the GATS reflects its importance as a way of providing services internationally. 2 By contrast, the General Agreement on Tariffs and Trade (GATT) does not cover foreign direct investment for goods, there is only a relatively narrow agreement, negotiated in the Uruguay Round, on trade-related investment measures (TRIMs). 23 Although the GATS includes establishment of a commercial presence as a mode of supply, it does not have a separate framework for investment like that of the NAFTA or the widely used bilateral investment treaties (BITs). 24 These agreements cover portfolio investment as well as direct investment in both goods and services. Moreover, unlike the GATS, they include nutriti on to ensure the protection of investmentsspecific rules governing expropriation and compensation, for exampleand also provide for arbitration of disputes between private investors and host-country governments. Presence of Natural Persons.The fourth mode of supply in the GATS, the temporary presence of natural persons, includes the temporary presence in the host country of employees of firms providing services across borders or through a commercial presence. For example, for financial services, this mode of supply covers the presence of nonlocal staff of a host-country branch or subsidiary of a foreign financial firm as well as agents of the firm visiting the host country to facilitate the provision of cross-border services. 25 Although the presence of natural persons is listed as a mode of supply in the GATS, and members can negotiate sectorspecific commitments, countries usually make commitments for the temporary presence of natural persons as horizontal commitments that 10 THE DO HA ROUND AND FINANCIAL SERVICES NEGOTIATIONS apply to all services sectors. 6 For the financial services sector, however, most countries that belong to the Organization for Economic Cooperation and Development (OECD) have incorporated into their schedules a set of commitments allowing the temporary entry of senior managerial personnel and certain types of specialists in association with the establishment of a commercial presence. 27 3 Liberalization and Regulation Q Policymakers, particularly in emerging market economies, are increasingly recognizing that opening markets to foreign financial firms can benefit both consumers of financial services and the domestic economy as a whole. As noted in chapter 2, the presence of foreign firms can create more competitive and efficient markets for financial services, thereby encouraging economic growth and development and contributing to a more resilient domestic financial system.At the same time, however, ensuring adequate prudential regulat ion and supervision of financial firms and markets, together with other fundamental domestic structural reforms, is essential to obtain the maximum benefits of liberalization while minimizing the risks. Basic structural reforms include increasing transparency and accountability in both the private and public sectors introducing effective risk management techniques and developing the institutional infrastructure, such as insolvency laws and appropriate judicial procedures. Because measures to promote competitive markets and to strengthen domestic financial systems are complementary and mutually reinforcing, the relationship between financial sector liberalization and regulation has two distinct dimensions. On the one hand, liberalization requires reducing or removing anticompetitive regulations that pose unnecessary barriers to trade in services. On the other hand, liberalization requires increasing the strength and quality of certain regulations and, in some areas, introducing new r egulations. Thus the process of liberalization involves, inter alia, reaching a consensus on where to draw the line between regulations that are simply anticompetitive barriers to tradeand should therefore be eliminatedand regulations that serve legitimate purposes. For financial services, the GATS contains a prudential carve-out for domestic regulation. 2 In the GATS, the term prudential is used broadly 11 12 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS o encompass not only measures to promote the integrity and stability of the financial system (as the term has traditionally been used in banking regulation) but also measures designed to protect consumers of financial services. The prudential carve-out, discussed later in this chapter, is designed to ensure that any obligations undertaken or commitments made in the GATS will not interfere with the ability of national authorities to exercise their responsibilities for prudential regulation and supervision. Whether a particular measure is prudential or simply being used to vacate a countrys obligations and commitments under the GATS is, however, an issue that could be brought before a WTO dispute settlement panel. All countries impose certain rules that are clearly prudential.Even if a measure is prudential, however, it may create a barrier to trade in financial services. This could occur because a host country imposes additional prudential requirements on foreign financial firms vis-a-vis their domestic counterparts. Such barriers could also be created simply because prudential rules differ among countriesthat is, even if each host country applies the same rules to foreign and domestic firms, financial services firms operating on a global basis often find it burdensome to comply with a multitude of different national prudential rules. A critical question is whether such barriers could be addressed without jeopardizing prudential goals.Specifically, in what areas and under what conditions might financial services regulators be able and willing to recognize each others regulations and supervisory practices as being as effective as their own? The GATS is permissive with respect to such recognition arrangements. However, as will be explained in chapters 4 and 5, the WTO is not the appropriate forum for financial services regulators to negotiate recognition of prudential measures. Three Pillars of Liberalization International contestability of markets refers to the creation of markets that are competitive and efficient on a global basisa goal that can be achieved by removing all types of barriers to foreign participation in hostcountry markets. International contestability is, in effect, based on three pillars of liberalization (1) national treatment and market access (2) the LIBERALIZATION AND REGULATION 13 removal of nondiscriminatory structural barriers, that is, domestic structural reform and (3) freedom of capital movements. For financial services, the GATS has so far dealt mainly with the first pillar. An important question for the Doha round is how far the negotiations should extend into the second pillar. The GATS deals with the third pillar only insofar as it affects countries specific commitments to liberalize trade in services in general, liberalization of capital movements is a matter of concern for the IMF 4 . National Treatment and Market Access. The first pillar of international contestability of markets is liberalization aimed at opening markets to foreign services and service suppliers and ensuring that they enjoy substantially the same treatment as their domestic counterparts. Such liberalization requires reducing or removing barriers that discriminate against foreign services and service suppliers with regard to entry and operation in a host-country market. A host country might, for example, discriminate against foreign financial firms by refusing to grant licenses for their branches or subsidiaries imposing limitations on their ownership positi on in domestic firms or on their aggregate market share or prohibiting them from engaging in certain activities that are tolerable for their domestic counterparts.First-pillar liberalization also requires removing various quantitative limitations on the overall provision of services in a host-country market. Although these barriers may not, on their face, be overtly discriminatory, they are typically used to block entry by foreign services and service suppliers. A country might, for example, limit the number of service suppliers in a particular market by restricting the number of new licenses that may be issued or by relying on an economic needs test, which involves an estimate of needs in the market by host-country authorities. 6 Because these measures have the effect of imposing some type of quantitative limitation on foreign entry, they are similar to the more overtly discriminatory barriers.To deal with these first-pillar barriers, the GATS uses the principles of national trea tment and market access. condition XVII (National Treatment) relies on a generally accepted definition of national treatmentthat is, it 14 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS requires a host country to treat foreign services and service suppliers no less favorably than like domestic services and service suppliers. 7 Barriers to entry or operation that discriminate against foreign services or service suppliers vis-a-vis their domestic counterparts would therefore be inconsistent with national treatment. The GATS does not attempt to define market access.Instead, phrase XVI (Market Access) provides a list of inhibitory measures, primarily quantitative, that are typically used by host countries to deny entry to foreign services or service suppliers. A country that does not maintain any of these measures is regarded as providing full market access. 8 The list includes seemingly nondiscriminatory quantitative barriers to entry that apply to both domestic and foreign fir ms, such as limitationsin the form of numerical quotas or economic needs testson the number of service suppliers or their total assets. It also includes quantitative barriers to entry that are clearly discriminatory and thus are also inconsistent with national treatment, such as limitations on foreign ownership interests in domestic firms.As a result, some overlap exists in the national treatment and market access provisions of the GATSthat is, certain measures may be inconsistent with both national treatment and market access. 9 The list of measures in Article XVI also includes restrictions on the type of legal entity through which services may be suppliedfor example, requiring establishment of a subsidiary as remote to a branch. In the GATS, national treatment and market access are specific commitments as inappropriate to general obligations. 10 As a result, national treatment and market access do not apply across-the-board to all services sectors instead, they apply only to sec tors, subsectors, or activities that a WTO member specifically lists in its schedule of commitments. 1 If a member is making only a partial commitment to national treatment or market access within a listed sector, subsector, or activity, any limitations must be listed in its schedule. 12 The use of specific commitments for national treatment and market access instead of obligations applicable to all services sectors is in some respects a structural weakness of the GATS. 13 Under a more ambitious approach, such as that used in the NAFTAs services and investment provisions, national treatment and market access would apply in each sector unless an exception was specifically listed in a countrys schedule of LIBERALIZATION AND REGULATION 15 commitments or one of the public policy exceptions, such as the national security exception, applied. 14 Nondiscriminatory Structural Barriers.The second pillar of liberalization required for international contestability of markets is aimed at removin g nonquantitative and nondiscriminatory structural barriers. Such barriers are associated with national measures that do not discriminate between domestic and foreign services and service suppliers. A secondpillar barrier could arise because a national measure is primarily anticompetitive or fosters anticompetitive behavior by private parties. In some cases, the barrier could be associated with the inadequacy or absence seizure of domestic regulationfor example, the lack of an adequate domestic legal framework for insolvency. A second-pillar barrier could also arise because of differences in national rules, including prudential rules, that make it difficult to conduct operations on a global basis.Removing second-pillar barriers goes far beyond achieving national treatment and market access. Those principles ensure that foreign services and service suppliers can enter a host-country market as currently structured and enjoy equality of competitive opportunities vis-a-vis their domesti c counterparts. By contrast, second-pillar liberalization represents an effort to create maximum potential competitive opportunities in a host-country market. Achieving this could require major domestic structural reform. This would necessarily involve some degree of carrefour of national regulatory systems, either de facto or through negotiated harmonization. A longstanding U. S. rohibition on affiliations between banks and insurance companies in the United States, which was repealed in 1999, created a major second-pillar barrier for many years. 15 Indeed, the European Union had found it difficult to accept that a European financial conglomerate that included both a bank and an insurance company could engage in only one of these businesses in the United States. Regardless of whether this nondiscriminatory restriction was primarily anticompetitive or could have been justified as a prudential measure, it nonetheless constituted a barrier to trade in financial services. Significant s econd-pillar barriers are often associated with national regulatory regimes for asset-management services. 16 These include 6 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS across-the-board prohibitions on delegation of functions, such as portfolio management and administrative operations, by the host-country office to a foreign affiliate extremely strict asset-allocation requirements for a domestic mutual fund or pension fund and rules that prohibit such funds from investing in foreign securities. 17 While asset management activities raise legitimate prudential concerns about ensuring adequate protection of hostcountry customers, these types of measures often serve primarily to restrict competition, particularly competition from foreign firms (see chapter 5).Nondiscriminatory structural barriers to trade in financial services are not limited to financial sector regulation. Barriers in other areas that are particularly important for the effective functioning of the financial ser vices sector, such as lack of adequate frameworks for corporate governance or insolvency, are part of the international work on strengthening domestic financial systems, which is discussed later in this chapter. Ineffective or wanting competition policy regimes, which could foster anticompetitive behavior by private parties, can also create major second-pillar barriers. Differences in national tax systems are even another source of second-pillar barriers.Discriminatory treatment of foreign firms under national tax or competition rules, however, would be a first-pillar barrier. 18 Second-pillar barriers can also arise from a countrys administrative proceduresin particular, a lack of regulatory transparency and procedural fairness. For example, a country might fail to give out all of its laws, regulations, and administrative decisions administer them in an impartial manner establish a meaningful procedure for interested parties to comment on proposed regulations act on application s for licenses within a reasonable period of time or provide a mechanism for independent review of administrative decisions.Because regulatory transparency and procedural fairness can be extremely effective in ensuring that commitments to market access and national treatment are fully implemented, they constitute an important underpinning of first-pillar liberalization. The European Unions single-market program represents the most far-reaching effort to date to remove nondiscriminatory structural barriers among a group of nations. Predicated on political agreement on goals for economic liberalization, that effort is being carried out in the context of LIBERALIZATION AND REGULATION 17 the unique supranational legislative, judicial, and administrative structure of the European Community. 9 Even within the European Union, however, important nondiscriminatory structural barriers to trade in financial services among the member states are still in place (see chapter 5). The GATS addresses certain types of second-pillar barriers. Article III (Transparency) imposes a general transparency obligation on WTO members to publish all measures of general application that are relevant to trade in services. 20 Article VI (Domestic Regulation) addresses, in fairly general terms, barriers created by domestic regulations. It requires countries to apply such regulations in a reasonable, objective and impartial manner to avoid undermining commitments to market access and national treatment. 1 Moreover, countries must have appropriate legal procedures to review administrative decisions affecting trade in services. 22 Article VI also mandates further work to develop disciplines to ensure that licensing requirements or technical standards do not constitute unnecessary barriers to trade in services. pending the completion of this work, countries must refrain from adopting licensing rules or technical standards that are so burdensome, restrictive of trade, or lacking in transparency tha t they undermine the benefits that could reasonably be expected from their commitments to national treatment and market access. 23 The GATS deals with additional second-pillar barriers for individual sectors in members schedules of commitments.The most far-reaching example is in basic telecommunications, where a substantial absolute majority of the countries that have made commitments to national treatment and market access in that sector have incorporated into their schedules using the additional commitments columna reference paper setting forth procompetitive regulatory principles. 24 Designed for a sector where dominant suppliers often control essential host-country facilities, these principles seek to ensure that a countrys national treatment and market access commitments will not be undermined. Countries committing to the principles undertake, among other things, to maintain measures to ensure network interconnection on nondiscriminatory terms and to prevent certain anticompet itive practices. 25 In the financial services sector, most OECD countries addressed nondiscriminatory structural barriers in their 1997 schedules of commitments 18 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS imply by making a general best efforts commitment to remove or eliminate any significant adverse set up of such barriers. 26 In addition, the United States and the European Union used the additional commitments column of their schedules to make best efforts commitments to remove specified nondiscriminatory barriers. For example, the U. S. administration pull to try to work with the Congress to remove Glass-Steagall Act restrictions, a goal that was subsequently accomplished, while the European Union pledged that its member states would try to process applications for licenses for banking and insurance subsidiaries within specified periods of time.Japan, under great pressure from its trading partners, went further and made binding commitments regarding removal of certain second-pillar barriersincluding restrictions on asset-management services and lack of regulatory transparency and limitations on lines of business in insurancethat were covered in its bilateral financial services agreements with the United States (see chapters 4 and 5). Freedom of Capital Movements. The third pillar of liberalization involves achieving freedom of capital movements across national borders. Such movements comprise international capital transactionsthat is, the creation, transfer of ownership, or reasoning by elimination of capital assets, including financial assetsand the payments and transfers associated with such transactions. 27 Restrictions on international capital movements are usually imposed on the underlying transactions as opposed to the related payments and transfers. 8 For example, if a country wished to restrict foreign direct investment in the banking sector, it could prohibit foreign financial firms from acquiring significant ownership interests in hos t-country banks it would be unusual to try to achieve this result by permitting the acquisition of the ownership interests while using exchange controls to block payment for them. 29 Although the free movement of capital plays a critical role in allowing efficient allocation of resources on a global basis, the Asian financial crisis of 199798 revived a long-standing debate over the appropriateness and effectiveness of capital controls, particularly on short-term flows. 0 Nevertheless, all parties to the debate agree that capital controls can never be a substitute for sound macroeconomic policies and fundamental reforms of domestic financial and legal structures. Indeed, the Asian crisis itself emphasized that weaknesses in domestic financial systems can create significant vulnerabilities LIBERALIZATION AND REGULATION 19 as capital movements are liberalized. At present, conventional wisdom holds that, although imposition of new capital controls should, in general, be avoided, the imp osition of limited, temporary capital controls to deal with massive temporary inflows or outflows of short-term debt might be useful in some cases. 1 Moreover, it is now widely recognized that removal of existing controls must be carried out with great care. Of particular importance are the ill-use and appropriate sequencing of liberalization of different types of capital flows and of liberalization of capital movements vis-a-vis structural reforms to strengthen domestic financial systems. 32 Freedom of capital movements per se is not within the purview of the GATS international capital movements and international trade in financial services are, however, closely related. Establishment of a commercial presence in a host country by a foreign service supplier involves both trade in services under the GATS and international capital transactions.For example, a commitment in the GATS to liberalize financial services trade by allowing foreign financial firms to establish wholly owned sub sidiaries is basically a commitment to allow foreign direct investment that involves the acquisition of 100 percent of the shares of existing or de novo hostcountry financial firms. 33 In scheme it is possible that, once established, the subsidiary could conduct its ongoing activities without engaging in additional international capital transactions however, its activities would need to be limited to transactions with host-country residents involving domestic financial assets. 34 Establishment and operation of branches, which are not separately incorporated in the host country, virtually always involve international capital transactions between the banks head office and the branch. 5 These transactions include both foreign direct investment and portfolio investment. 36 For branches conducting a wholesale business, ongoing activities would typically also involve international capital transactions with unaffiliated parties. For cross-border financial services, international capital transactions are typically either integral to, or closely associated with, the provision of the service. For example, international capital transactions are an integral part of accepting deposits from or making loans to nonresidents. In addition, international capital transactions are usually, although not necessarily, associated 20 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS ith financial services such as securities trading or asset management on behalf of a customer residing in another country. 37 By contrast, certain crossborder financial services, such as investment advisory services and financial information services, can be provided without an associated international capital transaction. The usefulness of investment advice might be limited, however, if the customer were disallow from investing in foreign assets. In general, it is difficult to realize fully the benefits of liberalization of trade in financial services without freedom of capital movements. Financial ser vices trade absolutely requires, however, the liberalization of only those capital movements that are necessary for the trade transaction to occur.In recognition of this relationship, Article XI of the GATS (Payments and Transfers) prohibits WTO members from imposing restrictions on capital transactions or associated payments and transfers that would be inconsistent with their specific commitments to liberalization of trade in services. 38 A footnote to Article XVI (Market Access) provides greater detailnamely, a country that has made a specific commitment to market access must allow (a) capital movements that are essential for the provision of a service in mode 1 (cross-border supply) and (b) inward capital movements that are related to a service supplied through establishment of a commercial presence. 39 The bottom line is that if a country makes a commitment to liberalize trade with respect to a particular financial service in the GATS, it is also making a commitment to liberaliz e most capital movements associated with the trade liberalization commitment.The country is not, however, making an across-the-board commitment to freedom of capital movements. The GATS provisions dealing with capital movements, like GATS specific commitments to liberalize trade in services, are subject to a balance-of-payments guard duty. 40 Both the capital movements and balance-of-payments safeguard provisions of the GATS refer to and are consistent with the IMFs responsibilities in these areas. 41 Strengthening Domestic Financial Systems The financial services sector has an elaborate and intensively used framework of international fora that are used, both separately and in combination, LIBERALIZATION AND REGULATION 21 o address overall financial and regulatory policy issues to promote cooperation and coordination among supervisors to set voluntary but widely accepted international minimum standards and codes of good practices and, most recently, to provide surveillance of domest ic financial systems. This surveillance includes monitoring and helping to build institutional capacity for implementation of the international standards and codes. The international fora dealing with these issues include the Group of Seven (G-7), the Group of disco biscuit (G-10), the Group of Twenty (G-20), the Financial Stability Forum, the Basel Committee on Banking Supervision (Basel Committee), and the International Organization of Securities Commissions (IOSCO), as well as the IMF and the World Bank. 2 The international framework for the financial services sector, which has been constructed over the past quarter century and is still evolving, is a response to two major factors the internationalization of banking and other financial activities and the special characteristics of the financial sector, especially the phenomenon of systemic risk. Because of systemic risk, problems with one financial firm can be transmitted to unrelated financial firms, both within and beyond a s ingle country. For example, a chain reaction of problems could be triggered through imitative runs on banks as depositors lose confidence in a banking system, through default on domestic or international interbank obligations, or through domestic or international payment systems.Problems in a countrys financial sector can also affect the real economy, both domestically and internationally, through declines in output and shifts in trade flows. In addition, the existence of global financial firms, with activities falling within many different national jurisdictions, requires cooperation and coordination among home- and host-country authorities to prevent gaps in supervision. Increasingly, these global firms are financial conglomerates, which means that supervisory cooperation and coordination are necessary across financial subsectors as well as national borders. For these reasons, countries have a stake in the quality of each others regulation and supervision of the financial sector a nd also in ensuring cooperation and coordination among supervisors.In this regard it is useful to distinguish between prudential regulation, which includes, for example, capital and other requirements designed to ensure the safety and 22 THE DOHA ROUND AND FINANCIAL SERVICES NEGOTIATIONS soundness of financial institutions, and supervision, which is aimed at making certain that financial firms stay to such requirements. The importance of strong, effective supervision cannot be overemphasized without it, the best prudential rules can be meaningless in practice. The extent to which both experience and good judgment are required for such supervision also needs to be emphasized. Indeed, the role and nature of supervision make it particularly difficult for supervisory authorities to reach recognition agreements based on the harmonization of prudential rules (see chapter 5).While regulation and supervision must be strong and effective, a further forking is that a poorly designed regulat ory systemfor example, an excessively generous deposit-insurance schemecan create an unacceptable degree of moral hazard that is, it may encourage excessive risk-taking by regulated firms. Accordingly, national regulatory and supervisory systems must be designed to complement and support, but not to substitute for, market discipline. Thus, achieving widespread transparency in both the public and private sectors, including accurate and timely disclosure of financial information, is critical